U.S. tariffs set to rise for Asian clothing manufacturers

U.S. tariffs set to rise for Asian clothing manufacturers

In the bustling garment industries of Bangladesh and Cambodia, over four million workers, the majority of whom are women from low-income and rural backgrounds, are bracing for a potential crisis. The United States has announced higher tariffs on garments, which could significantly impact these industries and the livelihoods of their workers.

The garment sectors in both countries are economic pillars, employing over 900,000 workers in Cambodia and hundreds of thousands in Bangladesh. Many of these workers have taken bank loans to support their families, working in the industry to pay off their debts. However, if the tariffs force companies to move or shut down, it could lead to job losses, threatening entire families.

In Cambodia, continued negotiations are necessary to get the tariffs down or find other ways to export more products, generate more income, and create more work to avoid problems. The potential layoffs will have an outsized effect on women workers, as they make up the majority of the workforce. If these women lose their jobs due to tariffs, they could lose everything.

The current status of tariff negotiations between the United States and main competitor countries India and Pakistan in the garment industry is tense and unbalanced. The U.S. has imposed steep tariffs on Indian textile and apparel exports, raising rates up to 50%, slated to take effect from August 27, 2025. This has led Indian exporters to halt manufacturing for U.S. orders while negotiations for a favorable bilateral trade deal continue but remain unresolved.

In contrast, Pakistan appears to have negotiated more favorable terms with the U.S., securing a lower tariff rate than its competitors, including India, reportedly around 19%. This reflects Pakistan leveraging high-level U.S. engagement, including mediation efforts during the 2025 India-Pakistan crisis, to improve its commercial ties and market access with the U.S.

Bangladesh, another key competitor in the garment sector, initially faced tariffs as high as 37% but successfully negotiated reductions down to 20% through concessions addressing U.S. trade concerns, including increased purchases of American goods. The differing tariff rates among South Asian garment exporters exacerbate competitive imbalances in access to the U.S. market.

The higher tariffs could make supply chain decision-making more difficult and erode the confidence of buyers and investors. The US is currently negotiating a trade deal with India, but reciprocal tariff rates for Pakistan have not been announced yet.

The article is tagged with topics like jobs, tax, trade, textiles, inequality, poverty, fashion, livelihoods, and is relevant to the United Nations Sustainable Development Goals 8 (Economic growth), 9 (Infrastructure), 10 (Inequality), 16 (Peace), and 17 (Partnerships). The story was published with permission from Thomson Reuters Foundation, a charitable organization covering humanitarian news, climate change, resilience, women's rights, trafficking, and property rights.

Other Asian countries are still negotiating with the US government regarding tariff rates. The US is the largest garment export destination for both Bangladesh and Cambodia. With the higher tariffs, the cost of products in both countries may significantly increase, potentially causing further disruption to these already vulnerable industries.

1. The SDGs, specifically Goal 8, Economic Growth, is relevant to the plight of over four million workers in Bangladesh and Cambodia's garment industries.
2. The majority of workers in these industries are women from low-income and rural backgrounds, bracing for a potential crisis due to increased tariffs on garments.
3. The garment sectors in both countries are economic pillars, employing over 900,000 workers in Cambodia and hundreds of thousands in Bangladesh.
4. Many of these workers have taken loans from banks to support their families, working in the industry to pay off their debts.
5. Job losses due to tariffs could lead to financial hardship for entire families, threatening their livelihoods.
6. In Cambodia, continued negotiations are necessary to reduce tariffs or find alternative means to export more products and avoid problems.
7. The potential layoffs will have a significant impact on women workers, who make up the majority of the workforce.
8. If these women lose their jobs due to tariffs, they could lose everything.
9. The tariff negotiations between the United States and main competitors India and Pakistan in the garment industry are tense and unbalanced.
10. The U.S. has imposed steep tariffs on Indian textile and apparel exports, raising rates up to 50%, scheduled to take effect from August 27, 2025.
11. This has led Indian exporters to halt manufacturing for U.S. orders while negotiations for a favorable bilateral trade deal continue but remain unresolved.
12. Pakistan, on the other hand, has negotiated more favorable terms with the U.S., securing a lower tariff rate than its competitors, including India, around 19%.
13. This reflects Pakistan leveraging high-level U.S. engagement to improve its commercial ties and market access with the U.S.
14. Bangladesh, another key competitor in the garment sector, initially faced tariffs as high as 37% but successfully negotiated reductions down to 20%.
15. The differing tariff rates among South Asian garment exporters exacerbate competitive imbalances in access to the U.S. market.
16. The higher tariffs could make supply chain decision-making more challenging and erode the confidence of buyers and investors.
17. The US is currently negotiating a trade deal with India, but reciprocal tariff rates for Pakistan have not been announced yet.
18. The U.S. is the largest garment export destination for both Bangladesh and Cambodia.
19. With the higher tariffs, the cost of products in both countries may significantly increase, potentially causing further disruption to these already vulnerable industries.
20. This situation is also relevant to the topic of inequality and poverty, outlined in the SDGs Goal 10.
21. The rise in tariffs could disrupt the retail sector, affecting the entire chain from manufacturing to transportation.
22. The aerospace and automotive industries might also be affected, considering the extensive use of textiles in these sectors.
23. The energy sector could potentially benefit from increased investment in cleaner and more efficient manufacturing processes.
24. The finance sector will likely have to adapt to the changing landscape, providing new financial solutions to support the affected industries.
25. The policy-and-legislation and politics sectors will play a crucial role in shaping future trade agreements and tariff policies.
26. The General News, Crime-and-Justice, and Learning categories could cover stories about the potential impact of these tariffs on human rights, corruption, and education.
27. In the Sports world, particularly football, the Champions League, NFL, WNBA, baseball, hockey, golf, European leagues, and basketball, brands may need to reconsider their sponsorship deals or sourcing strategies.
28. The Education-and-Self-Development and Personal-Growth sectors could offer training programs to help workers transition into other industries.
29. The Career-Development sector could provide guidance on job opportunities and skills training in industries less affected by the tariffs.
30. The Food-and-Drink, Fashion-and-Beauty, and Lifestyle sectors could face increased costs, affecting the prices of goods and the way consumers shop, invest, and make purchases.

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